It’s relatively easy to become a landlord by ‘mistake’ but what does it actually mean if you’re stuck with a property and need to rent it out?
What is an Accidental Landlord?
According to some research, 1 in 5 landlords don’t plan to be landlords at all.
You may have been left a property in a will. You might have moved to a new home but are unable to sell your existing one because of the sluggishness of the housing market.
Accidental landlords are people who find themselves the owner of a property that they can’t currently sell and so they decide to put it on the rental market. It makes sense, of course, not to leave the property empty but to utilise its cash-earning potential.
What Should You Do Next?
If there is still a mortgage to pay, the first step you need to do is clear your plans with your mortgage company and make sure they are okay with you renting out the property. If you are only using letting as a solution until you can sell the home, the mortgage company may well give you a Consent to Let notice that gives you leeway for 12 months.
Any longer than this and you will probably have to renegotiate the terms of the mortgage as a buy to let property.
Your Landlord Legal Obligations
As a landlord, you have certain legal obligations when it comes to taking on tenants and you must understand these. The legislation has been tightened up in recent times and there’s a lot to think about.
First, you will need special landlord’s insurance as standard home cover won’t be enough. You’ll also need to be prepared to pay tax on the rental income.
As far as legislation goes:
· You will have responsibility to ensure that anyone you choose to occupy your property has the right to rent under the Immigration Act 2014.
· You will need to put any deposit you take into a government-sanctioned tenancy deposit scheme.
· You must ensure that your property is safe, has the appropriate energy efficiency (E or above). Safety includes carrying out gas and fire checks.
· You may have to purchase a license from the local council, depending on where your property is located, if you want to act as a landlord.
You will also need to get the property ready for letting which might mean replacing things like carpets, finding furnishings and undertaking repairs.
Why Using an Experienced Local Letting Agent is Wise
For many accidental landlords, the responsibility and legislation is a bit of a minefield and can put them off renting out the property at all. Especially if you have moved to a new location and don’t have regular access, it can be difficult to manage everything.
One option is to give control over to a local letting agent who can manage the tenancy for you. There’s a lot to be said for this, particularly if you are hoping to sell the property sometime in the future. The agent will charge a fee for this, of course.
They will manage all the details for you including finding suitable tenants, vetting them, carrying out maintenance on the property, collecting rents and dealing with any potential problems that may arise during the tenancy.
Local property ExpertsAt Northwood we have Lettings offices throughout the UK and Landlord services to suit almost every scenario. If you have found yourself an accidental landlord and feeling a little out of your depth talk to one of our local property experts, you can find your nearest Northwood office by clicking here!